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12/05/2020 Aceitação Para Publicação: 08/02/2021 Economic analysis of sheep farms: a case study from eastern part of Turkey 389 Denis, A.; Yildirim, Í.; Çiftçi, K. Economic analysis of sheep farms: a case study from eastern part of Turkey Recebimento dos originais: 12/05/2020 Aceitação para publicação: 08/02/2021 Ahmet Deniz Agricultural Engineer Institution: Van Provincial Health Directorate Adress: Van, Turkey E-mail: [email protected] İbrahim Yıldırım Prof. in Agricultural Economics Institution: Van Yuzuncu Yıl University, Department of Agricultural Economics, College of Agriculture Address: Van Yuzuncu Yıl University Campus, Van, Turkey E-mail: [email protected] Kenan Çiftçi Asst. Prof. in Agricultural Economics Institution: Van Yuzuncu Yıl University, Department of Agricultural Economics, College of Agriculture Address: Van Yuzuncu Yıl University Campus, Van, Turkey (Corresponding author) E-mail: [email protected] Abstract Gross profit and profitability rates of 72 sheep farms in Center town of Hakkari was calculated and the relationship between milk production quantity per farm during lactation period and major production factors were determined using Coob-Douglas production function. Daily milk yield per sheep production unit and daily milk yield per sheep production unit per lactation was 0.28 g. and 47.59 kg, respectively. More than half (53 %) of gross production value ($ 8,435) was obtained from the selling values of lamb and goat followed by production values of milk with 25.7 %. Daily feed intake per sheep production unit was 1.87 kg, which roughage feed made up 97.64 % of total feed intake. On the other hand, feed costs per sheep production unit made up nearly two- third (74.68 %) of total variable costs. Gross profit per sheep production unit was $ 71. Coob-Douglas production function showed that a positive and strong relationship (R2 = 0.963) existed between total milk quantity per farm during lactation period and the major production factors. The total production elasticities was 1.71, which means increasing return to scale. Keywords: Sheep Farms. Gross Production Value. Variable Costs. Gross Profit. 1. Introduction Sheep production is regarded as an animal activity where it is not possible to promote other activities of diverse livestock farming systems due to marginal areas with harsh climatic conditions (Milan et al., 2003; Ripoll-Bosch et al., 2012; Toro-Mujica et al., 2012; Toro- Custos e @gronegócio on line - v. 16, n. 4, Out/Dez - 2020. ISSN 1808-2882 www.custoseagronegocioonline.com.br Economic analysis of sheep farms: a case study from eastern part of Turkey 390 Denis, A.; Yildirim, Í.; Çiftçi, K. Mujica et al., 2015a; Zekeri, 2015). It also allows protection of natural resources, preservation of life styles and prevention of rural exodus (Milan et al., 2003; Toro-Mujica et al., 2015a; Yıldırım and Şahin, 2006). Furthermore, raising sheep is relatively easy with minimal inputs and low maintenance costs (Kumar et al., 2013; Nix, 1988; Zekeri, 2015) and employs low levels of family resources (Selvakkumar, 2017; Zekeri, 2015). Sheep farming contributes a lot to a balanced nutrition (Kaymakçı et al., 2007; Kumar et al., 2013; Toro-Mujica et al., 2015a) while provides an immediate income for families, specially living in rural areas (Ibidhi et al., 2018; Kumar et al., 2013; Tsega et al., 2014). A sustainable profitability rate is regarded an essential for continuity of sheep farming (Gugic et.al.2012). Research fingdings indicate that many factors have effect on the profitability, namely, sheep breeds (Kırk, 2007; Krupová et al., 2014; Lavvaf et al., 2014; Toro-Mujica et al., 2012; Tsega et al., 2014), pasture areas (Bohan et al., 2018; Kumar et al., 2013; Morantes et al., 2017; Toro-Mujica et al., 2012), efficiency and productivity (Krupová et al., 2014; Toro-Mujica et al., 2011; Toro-Mujica et al., 2015b), production costs, specially feed costs (Coldow et al., 2005; Hilali et al., 2011; Lavvaf et al., 2014; Milan et al., 2014; Pamukova and Momchilov, 2017; Sirohi and Rawat, 2000; Toro-Mujica et al., 2012; Tsega et al., 2014; Zekeri, 2015), farm size (Dağıstan et al., 2008; Dellal et al., 2002; Kaymak and Sarıözkan, 2016; Kumm, 2009; Milan et al., 2014; Pamukova and Momchilov, 2017; Popescu, 2012; Tamer and Sarıözkan, 2017; Toro-Mujica et al., 2011; Toro-Mujica et al., 2015a; Toro-Mujica et al., 2015b), efficient management, (Krupova et al., 2014; Lavvaf et al., 2014; Morantes et al., 2017; Selvakkumar, 2017; Toro-Mujica et al., 2012), market prices (Ayvazoğlu et al., 2015; Hilali et al., 2011; Kumar et al., 2013; Tsega et al., 2014), capital and labor (Ayvazoğlu et al., 2015; Tsega et al., 2014; Zekeri, 2015) and disease (Tsega et al., 2014; Zekeri, 2015). The major hypothesises of this study was sheep farms would have a positive gross profit, and large-scale farms would have higher gross profit in comparison to small-scale farms. Furthermore, it was hypothesied that milk production per lactation could be raised by increasing the sheep numbers, lactation period, feed intake, labor demand and capacity of sheep barn, which means increasing return to scale would be the case. 2. Literature Review There exist many research conducted in the field of sheep economics and production scale in various countries including Turkey. The relevant literature has already been given in Custos e @gronegócio on line - v. 16, n. 4, Out/Dez - 2020. ISSN 1808-2882 www.custoseagronegocioonline.com.br Economic analysis of sheep farms: a case study from eastern part of Turkey 391 Denis, A.; Yildirim, Í.; Çiftçi, K. Introduction and Discussion section of this study. However, for convenient, some of research findings of previous studies is included in this section. Dalgıç ve Demircan (2019), who analysed the data of 80 sheep farms in Isparta Province, Turkey, reported that the production costs per animal unit decreased and net profit increased in parallel with farm size and concluded that the large-scale farms had advantage over the medium and small-scale farms. Stankov (2019) reported that the milk yield per sheep per lactaction and fertility rate in Shoumen District was 92 liter and 1.3 lambs, respectively. The meat and milk production value in the gross production value was reported as 79, 86 and 38, 5, respectively while the variable and fixed cost constituted 55,9 and 44,1 of total production costs. On the other hand, the reported feed costs in the variable and total costs were 78,72 and 44,00 %, respectively. The author concluded that it was not sustainable for black-headed Pleven sheep farming without government subsidies. Dalgıç et. al. (2018) calculated the average productivity of sheep farms in terms of returns for fixed and variable variable to scale as 0,41 and 0,48 in Isparta Province, Turkey, and classified the major factors effective on the productivity as education level, the combination of family and hired labor, milk yield, lambs per sheep and age of leaving the herd. Karadaş (2018) reported the number of sheep, lamb and ram as 96, 86 and 6 in Hakkari Province, Turkey and pointed to that the milk is transformed into fat, yogurt, cheese and ayran and these products are marketed. Popoviç (2018) pointed to that the main income of 30 sheep farms in the Hilly- Mountain regions of Serbia was obtanined from lamb meat and sheep cheese. Şahinli ve Özçelik (2013) reported that the feed costs constituted 63,47 % of variable costs followed by labor costs with 24, 24 % for 104 sheep farms in Isparta province, Turkey. 3. Material and Methods The main material of this research paper was 150 sheep farms in Center town of Hakkari Province, Turkey, which has borders to Iran and Iraq Countries. The farms located at 8 villages, namely, Dağsu, Umutlu, Çaylıca, Durankaya, Biçenek, Derebaşı, and Bay, where an extensive sheep production was available. The data belonged to 2008 production period. Out of total population (150 sheep farms), 72 farms was determined as a sample size with help of following stratified random sampling method with 10 error percentage and 90 % Custos e @gronegócio on line - v. 16, n. 4, Out/Dez - 2020. ISSN 1808-2882 www.custoseagronegocioonline.com.br Economic analysis of sheep farms: a case study from eastern part of Turkey 392 Denis, A.; Yildirim, Í.; Çiftçi, K. reliability range (Erkuş et al.,1996). The data was collected from farm managers interviewing face to face. Where; n= Sampling size N= the number of farms in population Nh= the number of farms in h th strata S2h=the variance at h th strata D2=d2/Z2 value d= Error amount permitted from the population average Z= Z value in standard normal distribution according to error amount The farms were classified into three size groups taking into consideration the percentage distribution of each group in the total farms. Thus, the small-scale farms (farms with 1-50 sheep), medium-scale farms (farms with 51-99 sheep) and large-scale farms (farms with 100 and more sheep) constituted of 38.9 % (28 farms), 40.3 % (29 farms) and 20.8 % (15 farms) of the investigated farms, respectively. Extreme values were controlled by means of outlier test before the data was analysed. Variance analysis was applied to see whether there was statistically significant differences among some means of physical variables size groups. The relationships of milk production quantity per farm during a lactation period and used inputs were determined using Coob- Douglas Production Function. Thus the production elasticities of inputs was calculated directly. The productivity, costs, income and profits were calculated based on sheep production unit (Açıl and Demirci, 1977; Oktay, 1981; Yıldırım, 1993) due to difficulties of discriminating of feed intake, and labor and barn demand for different types of animals. In calculation of sheep production unit one sheep, one goat, lamb number per sheep and yearlings per goat, 0.04 ram, and 0.20 amortization of herd was taken into consideration as a technical coefficients.
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